Posted on 15 February 2012 by Jade
My mum has a house which still has £110k on the mortgage (My dad left and remortgage just before leaving us with a huge mortgage) She can just about afford it on interest only. I want her to stay in the house as its our family home - i would like to take it on as a second property and she "rent" off me - is this possible? Does she need to sign the mortgage & deeds over to me? Would i need to get a new mortgage or can I add my name to the current one?
Probably the easiest way to go about this is to speak to your mother's existing lender and see if they will consider transferring the mortgage into your joint names whilst allowing her to continue living in the property.
I think this would be more likely to be accepted by the lender than transferring the property into your sole name as there are several reasons that they might not want to do this. The main one is that you mother will have a legal right of occupation and unless she is willing to waive this in favour of the lender, it would mean that they could not take vacant possession if you defaulted on the payments. This would not be an acceptable situation for them because it would mean that they would be very unlikely to be able to sell the property and recoup their mortgage debt, outstanding interest and legal fees.
You are likely to encounter this problem with most lenders you approach and indeed there are some who just will not consider it even with a waiver of your mother's rights.
You should also both take independent legal advice because your mother will be selling some, if not all the property to you and it is possible that she will want to be paid for this. It is possible that there may also be a Stamp Duty Land Tax liability to be considered and possible Inheritance Tax implications.
If your mother's lender is unable or unable to help I believe we can and that you would benefit from speaking to one of our independent mortgage advisers. Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right mortgage for your situation.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.